Prime Minister Anthony Albanese says the federal government told the Australian Bureau of Statistics to cancel testing on new census questions canvassing sexuality, gender identity and intersex status because they "weren't appropriate".

The revelation comes almost a week after the government quietly confirmed it would not include the questions in the next census, despite it forming part of Labor's national platform.

The move sparked days of backlash from the LGBTQI+ community and led a handful of Labor MPs to call for the decision to be reversed.

Mr Albanese appeared to back down on Friday, stating that the ABS would proceed with testing one new question on sexuality.

However, it remains unclear whether the government will move forward with expanded questions on gender identity and variations of sexual characteristics, which were previously being considered.

The prime minister refused to commit to reinstating the draft questions on Sunday, but said the government would work through the issues with the ABS and the LGBTQI+ community.

There was already an "identity-type question" asked in the previous census, he said, and that "there should be something included about sexual orientation as well".

Confusion over why the tests were cancelled

Since the start of the week, the government has offered up a range of explanations for why it told the ABS not to proceed with testing the expanded questions.

Deputy Prime Minister Richard Marles on Wednesday said it was to avoid a "divisive" debate, which was echoed on Thursday by Treasurer Jim Chalmers, who told the ABC he feared the issue would be weaponised against the LGBTQI+ community.

Then on Sunday, Social Services Minister Amanda Rishworth seemed to suggest that the questions were too complicated to proceed with.

"We were presented, as a government, questions that were very complex in the census and the prime minister's been really clear … that we want people to complete the census and we want simple questions that people can understand and answer, and that's really important," she told Sky News.

"The census isn't for another two years and I think we've got plenty of time to make sure that we get the question right."

Mr Albanese backed in that reasoning on Sunday afternoon, stating: "Quite clearly, what there should be is commonsense questions asked that are quite easily understood."

"The ABS were going to go out and test some questions on Monday … that's why we put a pause on that so that we could consider appropriate questions that were easily understood by people when they get the census," he said.

"My government values every Australian, regardless of who they are, regardless of their sexuality, their race, their faith, their gender: we value every single Australian."

Coalition senator says questions 'reasonable'

The Coalition's commentary on the issue has also been mixed, with Opposition Leader Peter Dutton initially telling reporters on Thursday that it was part of the "woke agenda" and there was no need for the expanded questions.

"If you've got the woke agenda, which I think is at odds with the majority of Australians, then the prime minister should argue that case, but I think we're pretty happy with the settings we've got in place at the moment," he said.

The following day, however, he said he was "fine" with the questions if the prime minister had a proposal.

On Sunday, Liberal senator Andrew Bragg said he thought it was reasonable for the census to ask questions about both sexuality and gender identity "in a modern society".

"I think the fact that the prime minister has tied himself in knots on this issue shows a great weakness in his own leadership," he told ABC's Insiders.

"The Labor Party promised this at the last election, so I'm not surprised that the LGBT lobby is very disappointed and feels let down."

Senator Bragg's comments followed those of Nationals leader David Littleproud, who said he was "open to any question that will advance the lives of Australians".

"If we need that data, then the question should be asked," he said.

The Greens have said they will bring the issue to a vote when parliament returns if the prime minister does not commit to including gender identity and intersex status in the survey.